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-The Figure Above Shows the Market for a Good with an External

Question 116

Multiple Choice

-The figure above shows the market for a good with an external benefit.If the market is competitive and the government takes no action,the equilibrium quantity of ________ units is inefficient because ________. A) 8; marginal benefit exceeds marginal cost B) 8; marginal cost exceeds marginal benefit C) 10; marginal cost exceeds marginal benefit D) 10; marginal social benefit exceeds marginal benefit E) 10; marginal external benefit exceeds marginal social benefit
-The figure above shows the market for a good with an external benefit.If the market is competitive and the government takes no action,the equilibrium quantity of ________ units is inefficient because ________.


A) 8; marginal benefit exceeds marginal cost
B) 8; marginal cost exceeds marginal benefit
C) 10; marginal cost exceeds marginal benefit
D) 10; marginal social benefit exceeds marginal benefit
E) 10; marginal external benefit exceeds marginal social benefit

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